Oil skyrockets this Monday. Both the Brent barrel, the benchmark in Europe, and the West Texas quality barrel, the benchmark in the US, rose by more than 7% due to fears about supply aroused by the attack by the United States and Israel on Iran this weekend. Although the Strait of Hormuz, a key passage area for the circulation of crude oil, has not been officially closed, the truth is that oil tanker traffic has practically stopped. And the shipping companies have taken precautionary measures, for what may happen, and have decided to limit their passage through the Strait of Hormuz, through which approximately one third of the world’s oil exports circulate by sea. Investors’ fear is that the war between the United States and Iran will spiral out of control and end up causing a major supply disruption. That is why Brent rises and is trading at $78, while West Texas is now trading at $71. This weekend the US and Israel launched a battery of airstrikes against Iran that led to the death of the country’s supreme leader, Ayatollah Ali Khamenei, and other senior officials of the Islamic Republic. It is still unknown who will govern OPEC’s fourth largest oil producer. In any case, experts point out, the final reaction of the oil market will depend on whether the war causes a prolonged interruption of traffic through the Strait of Hormuz, the most important passage point in the world for the global oil trade. «The crucial Strait of Hormuz remains open, even though shipping traffic using the waterway has reduced significantly due to clearly rising tensions in the region, which in turn has led to an increase in insurance costs,» says Michael Brown, senior research strategist at Pepperstone. «As usually happens in these types of situations, everything is incredibly fast and fluid. The attacks from both sides continue,» but the most important thing, this expert points out, is the death of the Iranian supreme leader, which «creates a leadership vacuum in the country and is in line with Donald Trump’s stated goal of regime change.»
